Evolving Door

hat should we think about situations where career military officers or civil servants retire and then join firms doing business with the government? This is an age-old question, given renewed currency by publicity involving former Air Force acquisition official Darleen Druyun's move to Boeing.

There is a received answer to this question: Such movement is a problem. Before these people leave government, it is feared, they may make decisions biased in favor of a company where they hope to work. After they leave, they may exploit friendships with colleagues still inside government to gain contracts for their new employer.

My view is different. On balance, government is better off because many contractors (particularly those in the defense and information technology industries) have significant numbers of ex-government employees.

There is one obvious benefit to government from this movement: post-employment opportunities based on knowledge of the government increase the attractiveness of government service for talented people. They may be willing to put up with relatively low government salaries if they know their government-specific knowledge has value after they leave-a fact clearly helping government's ability to attract lawyers to the Securities and Exchange Commission or accountants to the Internal Revenue Service, for example.

But I want to emphasize a benefit of having ex-career people working for contractors that is seldom mentioned-the presence of these ex-employees increases the odds a contractor will perform well and deal honestly with its government customer.

Broadly speaking, there are three ways to ensure good treatment from a contractor. The first is to use contractual incentives and evaluations of past performance. Thanks to procurement reform, government is doing a better job with incentives and past performance checkups in the contract award process, though we still need to make more progress.

The other two ways to encourage good performance are controls and common values. Controls assume contractors are amoral calculators: They will try to perform as poorly, and charge the government as much, as they can get away with, so inspectors and auditors must be used to stop them. With common values, by contrast, contractors treat the customer right because they feel a commitment to do so.

Government certainly can't eliminate controls as one way to assure itself contractors are behaving well. Contractors are for-profit organizations, and nobody (including contractors themselves) believes they work solely for the good of the customer.

There are, however, real limits to the effectiveness of controls. First, in many contracting environments it is extremely difficult for inspectors and auditors to know whether the contractor has genuinely tried as hard as possible. Second, controls cost a good deal of money. Finally, the assumption that the contractor is out to cheat the government can become a self-fulfilling prophecy, reducing the contractor's self-generated commitment to produce good work. People resent being mistrusted and lose any internalized commitment to perform, and when they are, the climate of trust that can produce valuable information-sharing between customer and contractor disappears. As commitment declines, the need for ever-increasing controls appears.

Because controls are costly, it makes a lot of sense to try to minimize the need for them by relying instead on shared commitment. At an international conference of public management practitioners and academics last spring, a senior British government executive said, "We want to feel contractors share our values." That statement reflected a knowledge of the costs and limits of controls as a way to get good performance and honest treatment from contractors.

This is where movement of career officials to contractors comes in. Does anyone really believe-as virtually all discussions of this issue assume-that most longtime military officers or civil servants, having spent a career working for an organization, leave government, go to work for contractors selling to their organizations, and proceed to turn around and look for ways to take advantage of the place where they spent much of their working lives? I regard this suggestion as bizarre. It belies everything we know about loyalty and identification.

Surely, there are disgruntled or maladapted people indifferent about hurting their former organizations, or even eager to do so. (These are hardly the people most contractors would hire.) But it is clear as day that typical Air Force officers or career employees of the IRS would no sooner harm their former organizations than betray a friend.

Virtually every one of the ex-government officials I know now working for a contractor acts in effect as a government ambassador to the contractor, bringing public-sector values into these private firms. I believe government would get less fair treatment if contractors didn't have significant numbers of these people on their payrolls.

These ex-government employees are not simply government ambassadors to contractors; they also provide contractors with value, or else they wouldn't be hired. Beyond providing subject-matter expertise, their presence on a contractor team surely does make it easier for the contractor to win business from those at the agency who knew, or knew of, the ex-employee. This shouldn't be seen (until proved otherwise) as unjustified "cronyism." For it to be unjustified, the contract would have to be awarded to the firm without good reason to expect that the contractor, with the ex-employee actively involved, would provide the best value for the government. But the point is that the ex-employee gives the agency greater confidence that the contractor will perform well.

This is not to suggest that the movement of career military officers or civil servants to contractors has no costs or risks. While post-employment opportunities may help to attract some talented people to government, it is fair to be worried about using public service for private gain. Furthermore, the appearance of a conflict of interest, often hard to allay, may damage trust in public institutions-though we should be concerned about making policy based on wrong-headed prejudices, even if widely held.

Probably the most significant risk is that employees looking to find jobs in industry will go unduly soft, or show favoritism, either to a specific firm or to industry in general. Showing favoritism to a specific firm is risky for the employee-if that firm is not hiring when the employee wishes to leave, he or she risks seeking a job with other firms angry at the favoritism. Undue "softness" toward industry in general is a bigger worry, though one may see this pressure as counteracting a general tendency within the government culture to be too suspicious of industry.

On balance, movement of career government people to industry doesn't deserve the opprobrium with which it has been greeted.